Non-arm’s length transaction – LTV of 80%?

Background: We are purchasing a home from my mother (so non-arm’s length transaction). She is providing us with a gift of equity of $40,000 and $10,000 is seller concessions (we can change that to part of the gift of equity if needed). We were planning on putting down $10,000 (2.7% of value of home) from our own bank account. For a total downpayment of $50,000 (13.3% down).

Appraised value of home is $373,500 (which is the set selling price)

The lender has come back and said that Fannie Mae guidelines have changed that we have to have an LTV ratio of 80% since it is a non-arm’s length transaction. I have not been able to find this guideline anywhere.

I could understand if we need to be putting at least 3% down on the value of the home to meet the LTV ratio of a conventional loan. (And we can do that).

My question: Anyone know about these updated changes? What are we missing here in terms of being able to get a loan on the purchase?

submitted by /u/bullcity_gh
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Background: We are purchasing a home from my mother (so non-arm’s length transaction). She is providing us with a gift of equity of $40,000 and $10,000 is seller concessions (we can change that to part of the gift of equity if needed). We were planning on putting down $10,000 (2.7% of value of home) from our own bank account. For a total downpayment of $50,000 (13.3% down). Appraised value of home is $373,500 (which is the set selling price) The lender has come back and said that Fannie Mae guidelines have changed that we have to have an LTV ratio of 80% since it is a non-arm’s length transaction. I have not been able to find this guideline anywhere. I could understand if we need to be putting at least 3% down on the value of the home to meet the LTV ratio of a conventional loan. (And we can do that). My question: Anyone know about these updated changes? What are we missing here in terms of being able to get a loan on the purchase? submitted by /u/bullcity_gh [link] [comments]

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